Tag Archives: climate

How Uber, Airbnb and Amazon Can Help Combat Climate Change

Can we use the disruptive model pioneered by Amazon, Uber and Airbnb in the struggle against climate change?

Uber is the world’s biggest taxi company, but doesn’t own a single taxi cab. Airbnb and Booking.com are the world’s largest hoteliers, but don’t possess any hotels. 

And after being in business for a quarter of a century, Amazon – the world’s biggest bookseller – is only now experimenting with physical bookshops.

There are many lessons to be learnt from such examples. Chief among them, perhaps, is that being disruptive does work. 

These days, businesses and consumers are far more receptive to ‘early-stage’ disruptive ideas. They have seen for themselves how easy it is to be overtaken and left behind by clever ideas whose time has come.

I’ve been thinking a lot about disruptive ideas in recent weeks. And in particular, I’ve been thinking about disruptive ideas in the context of sustainability.

And the conclusion I’ve come to? 

We may need some fresh disruptive ideas and business models if the sustainability agenda is to make much more progress.

Report card

That may sound mad. Since – say – the 1970s and 1980s, the world’s environmental protection initiatives have made huge progress.

Sustainability is high on both corporate and government agendas. Cars are far more fuel-efficient. Houses, offices and factories are far more energy-efficient.

Skies are clearer, water cleaner – especially in the developed world, although progress is being made elsewhere, too.

And yet, and yet. Waters are clearer, yes. But visible pollution has been replaced with microplastic fibres.

Smoke from coal-burning has gone from our skies. Yet CO2 emissions are at record levels. The Amazon’s rainforests are vanishing. Sea levels are rising. And average temperatures are increasing.

Is it any wonder that groups such as Extinction Rebellion are protesting so vociferously? Or that the activism of teenage protesters is so widely applauded?

Lip service

For me, personally, one of the most persuasive signs that current approaches to sustainability aren’t delivering fast enough has come from the Harvard Business Review

Late last year, influential management thinker John Elkington took to its pages to officially ‘recall’ – that is, take back – a concept he first launched 25 years ago: the Triple Bottom Line.

Simply put, he argued, the Triple Bottom Line was no longer enough. Something else was needed. Something bolder.

The idea behind the Triple Bottom Line was simple. Instead of focusing on just profit, the Triple Bottom Line sought to get businesses to view their performance in a broader context.

They should examine their social, environmental and economic impact.

The idea has had a powerful effect. Twenty-five years on, it’s made a big difference. 

But it isn’t enough, acknowledged Elkington. Too many businesses see it as a trade-off mechanism, rather than as an absolute test.

Something else is required if we are to really ‘shift the needle’.

As he eloquently put it: ‘We have a hard‑wired cultural problem in business, finance and markets. Whereas CEOs, CFOs and other corporate leaders move heaven and earth to ensure that they hit their profit targets, the same is very rarely true of their people and planet targets.’

The ugly side of fashion

Which is why I’ve been thinking about disruptive ideas, and alternative business models.

Could they do enough to ‘shift the needle’?

I’m excited about their potential, to be sure.

Take the fashion industry. It’s been described as the second-most polluting industry in the world.

In water-scarce countries, water goes to produce cotton, not food. Microplastics from synthetic textiles fill our rivers and oceans.

According to the United Nations, the fashion industry consumes more energy than the aviation and shipping industries combined. It is responsible for up to 20% of global wastewater, and 10% of global carbon emissions. 

Container ships full of cheap clothes ply the world’s shipping lanes. They belch out vast amounts of the sulphur-laden black smoke that comes from burning bunker oil, the world’s dirtiest fuel.

And yet, at the end of it all, a lot of ‘fast fashion’ simply gets thrown away. The UK sent around 300,000 tons of clothing to landfill in 2016, for instance.

What can be done? 

Instinctively, most people think about some form of clothes recycling. But they are forced to conclude that the technology to cost-effectively turn unwanted clothing into useable yarn doesn’t yet exist.

But there’s another form of clothes recycling that doesn’t need technology. Or rather, the technology that it needs is already developed and with us.

The sharing economy

I’m talking about clothing rental, which is catching on fast.

Names such as Girl Meets Dress, My Wardrobe HQ, By Rotation, Rent the Runway.

These and others are offering affordable clothing rental services, either on their own account (they own the clothes), or as intermediaries (other people own the clothes).

At the moment, a lot of the activity is at the high end, in designerwear. Fast fashion it isn’t – yet.

That said, there are experiments underway. H&M, for instance, is trialling a rental scheme at its flagship store in Stockholm. In the United States, Banana Republic has recently launched a rental service.

Even so, it’s clear that what’s going on has the potential to evolve and grow.

As a business model, it’s different and disruptive. And it addresses many of the sustainability issues of the traditional ownership model. 

Instead of being hung up in a wardrobe, clothes are worn again and again – just by different people.

So could such a model ‘shift the needle’ in terms of fashion’s impact on the environment?

No one, including me, yet knows: it’s far too soon. Right now, fashion rental is far from becoming mainstream.

But don’t forget: so too, once, were Uber, Amazon and Airbnb.

Disrupting accepted business models in fashion – and other areas – could really help in the struggle to combat climate change.

This article was written by London Roundtable attendee, Omera Khan. If you are also interested in attending our next Roundtable in London, you can contact [email protected]

Trump Has Exposed Corporate America to a Carbon Tariff

Putting aside the issue of catastrophic global warming for a minute, let’s look at a very possible consequence of the U.S. withdrawal from the Paris Agreement – retaliatory measures from other nations in the form of a carbon tariff on American products.

Well, there goes the planet.

Trump’s withdrawal from the Paris Agreement has dominated the headlines all weekend, and rightly so – it’s regarded by many as the most devastating decision of his presidency so far.

Rather than dwelling on what has already been covered – the diminishment of U.S. moral leadership, short-termism, isolationism and the rejection of science – let’s examine the very real threat of economic countermeasures from other nations.

The idea of a carbon tariff was first suggested by former French President Nicholas Sarkozy in November last year. “[If Trump] won’t respect the conclusions of the Paris climate agreement … I will demand that Europe put in place a carbon tax at its border, a tax of 1-3 per cent, for all products coming from the United States, if the United States doesn’t apply environmental rules that we are imposing on our companies.”

Writing for Forbes last week, London Business School’s Ioannis Ioannou suggested a similar course of action:

“Countries and transnational institutions should seriously consider and carefully evaluate potential sanctions or economic countermeasures. A tax or import tariff on U.S. made products and services would account for carbon emissions used in the manufacturing process or, more ambitiously, incentivise leading companies to move parts of their business out of the U.S.”

Leading U.S. CEOs alarmed

As part of a last-ditch plea from Corporate America to dissuade Trump from his decision, an open letter was published last week in Washington, D.C. newspapers and signed by companies including Apple, Google, Facebook, Microsoft and Unilever. Amongst the warnings listed in the one-pager, the risk of retaliation was called out:

Withdrawing from the agreement will limit our access to [clean technology markets] and could expose us to retaliatory measures.”

It’s not just the dot coms who have come out in support of the Paris Agreement. Oil giants ExxonMobil and ConocoPhillips made the case that the U.S. would be much better served by having a seat at the table to “safeguard its economic and environmental best interests” – i.e. retain a veto – in future climate negotiations.

The fairness argument

Trump used the word “fair” and “unfair” multiple times in his speech:

“The bottom line is that the Paris Accord is very unfair at the highest level to the United States.”

“…Negotiate our way back into Paris under the terms that are fair to the United States and its workers.”

“…Under a framework that is fair and where the burdens and responsibilities are equally shared …

“We want fair treatment for its citizens and we want fair treatment for our taxpayers.”

The decision to withdraw, however, means the U.S. will have the fairness argument thrown back at it. As trade partners including Canada, Mexico, China and the EU implement carbon trading systems and caps, resentment is likely to grow towards the world’s second-largest emitter of carbon dioxide. For countries looking to address this disadvantage, a carbon tariff would serve to level the playing field.

Dirk Forrister, International Emissions Trading Organisation president and CEO, made the point that the Paris Agreement was designed to avoid this situation from occurring:

“The notion of a trade battle over climate change is something everyone’s tried to avoid for two or three decades. That’s why we have an international agreement to put everyone in the same frame.”

Here’s the good news

Trump wants to renegotiate his way back in. While Trump’s apparent willingness to re-enter the Paris Agreement on American terms shows some promise, it may not be possible. Christiana Figueres, the former UN official who led the negotiations, said this isn’t how international agreements work. “You cannot renegotiate individually,” she said. “It’s a multilateral agreement. No one country can unilaterally change the conditions.”

Other nations are rallying: There has been some commentary after Trump’s announcement that the Paris Agreement is actually stronger without U.S. participation. While many of the arguments inevitably read like sour grapes, two points ring true: firstly, the announcement appears to have strengthened the resolve of other nations to meet their targets. International leaders are lining up to not only condemn Trump’s decision, but to reaffirm their commitment to the Agreement.

Secondly, the Trump Administration’s rollback of domestic climate policies, including gutting the Green Climate Fund and hobbling the EPA, means that the U.S. was highly unlikely to meet its climate targets anyway. Australian International Relations and Environmental Policy export Luke Kemp argues that this would have set a poor example: “Other countries [would have been] more likely to delay or free-ride on their pledges if they [saw] the US miss its target.”

U.S. states, cities and corporate leaders are embracing a low-carbon economy, despite (or to spite) Trump. Examples include Californian leadership in reducing emissions, and the Mayors of 61 cities across the U.S. pledging on Thursday to meet commitments agreed to under the international accord.

The transition to the renewable economy is gathering pace. The economics of higher energy efficiency, falling renewable energy prices, abundant natural gas, and the rise of electric vehicles and smart grids will continue to displace coal and oil.

November 3rd, 2020: The rollback of the Paris Agreement and other climate initiatives will take years, as will any retaliatory measures (such as tariffs) put in place by other nations. Could the 2020 election become a referendum on the Paris Agreement?

Image: Shutterstock